Results Bolstered by Wireless Division, Growth in Internet and Television Operations

BCE Inc.,
BCE -0.37%
Canada’s biggest telecommunications company, posted a better than expected fourth-quarter profit and higher revenue on Thursday, bolstered by a strong performance from its wireless division and growth in its Internet and television operations.

Montreal-based BCE also raised its dividend by just over 5%, citing expectations for higher free cash flow and a strong business outlook for the current year.

The company earned 542 million Canadian dollars ($431 million), or 64 Canadian cents a share in the fourth quarter, up 9.5% from a year earlier.

Adjusted to exclude certain items, BCE earned 72 Canadian cents a share, ahead of the 71 Canadian cents analysts polled by Thomson Reuters were expecting.

Revenue rose 2.7% to C$5.53 billion, also besting the C$5.46 billion analysts were forecasting. BCE’s main operating unit, Bell Canada, contributed C$4.94 billion to revenue in the latest quarter, up 2.6% from a year earlier.

The company said it added nearly 178,000 net new customers from communications growth services in the quarter, which includes wireless, television and Internet services.

It said operating revenue from its wireline, or landline, unit rose 1% in the latest quarter, marking the first quarter of positive growth since 2010. This was driven by residential growth, partly due to stronger adoption of broadband Internet and television services.

Wireless revenue rose nearly 10%, helped in part by an increase in mobile- data use on smartphones and higher pricing on rate plans, it said.

“Bell Wireless delivered exceptional customer additions and strong revenue growth, including a significant quarterly increase in average revenue per customer as smartphones and data services soar in popularity,” BCE Chief Executive
George Cope
said in a statement. It said the percentage of postpaid subscribers with smartphones rose to 76% at the end of the quarter, compared with 73% at the end of 2013.

The company guided for 2015 revenue growth of 1% to 3%, adjusted earnings of C$3.28 to C$3.38 a share and free cash flow growth of about 8% to 15%. Free cash flow guidance for the year is well ahead of the 6.7% it recorded in 2014, largely due to the inclusion of its Bell Aliant unit.